Are these millionaires really buying luxury vehicles for free through the Section 179 tax deduction loophole. They all like to make you think so, but there's something they're not all telling you. So let's say you want to flex on your friends for absolutely zero reason and you go buy a G wagon for 250 000. When you file your taxes, you're allowed to bonus appreciate the G wagon and essentially write off 250k of income.

If you made 250 000 that year and you wrote off 250 000 that year, you essentially profited zero dollars in the eyes of the IRS. So number one, you didn't buy the G wagon for free. You bought it for 250 000. You just didn't have to pay taxes on your income that year.

But two, the important cash to the Section 179 loophole that no one talks about is something called depreciation recapture. if you only use the G wagon for two years and then sold it for 100k because no one wants to use G wagon, you now have to pay taxes on the unused appreciation that you wrote off. So on the sale, you're now adding more to your total taxable income that year than what you actually made. This is why rich people can do a never-ending spiral of needing more bonus appreciation to offset their taxable income.

I'm no tax professional, but.